SEC lays groundwork for crypto issuers to raise flexible capital with new rules proposal

Can the new proposal provide the regulatory bridge crypto issuers need while Congress works towards a broader framework?

The SEC’s proposed Regulation Crypto Assets could give crypto issuers more flexibility to raise capital in the US while Congress negotiates broader legislation, but lawyers say it will not resolve fundamental questions over regulatory authority for digital assets.

‘While both involve digital assets, the CLARITY Act and the SEC’s rule proposal operate on different tracks and are not substitutes for one another,’ said Sanjeev Bhasker, partner at K&L Gates and a former White House advisor on digital asset and emerging technology policy.

Speaking to Governance Intelligence, he added: ‘The SEC’s proposal, by contrast, operates under existing statutory authority and would create new offering exemptions and a conditional safe harbor for investment contracts involving crypto assets.’

The SEC proposed Regulation Crypto Assets on August 18, describing it as a framework of tailored rules for certain investment contracts involving crypto assets. The proposal comes as the Senate’s procedural vote on the CLARITY Act is scheduled for September 15.